COST OF DOING BUSINESS

START-UP COSTS

I. REGISTRATION FEES

*Legal Research Fee equivalent to 1% of Filing Fee but not less than P10.00 Source: http://www.sec.gov.ph/

Source: http://www.dti.gov.ph/

BOARD OF INVESTMENTS (BOI) Registration for incentives availment under EO 226

Main Fees to be Paid (In Pesos)

Filing Fees for Application for Registration (under Book 1):

Project Costs not exceeding P 4 million P1,500.00

Project Costs exceeding P 4 million but not over P 20 million

P3,000.00

Project Costs exceeding P 20 million but not over P 50 million

P4,500.00

Project Costs exceeding 50 million P6,000.00

Fee for Certificate of Registration 1/10 of 1% of project cost but not less than P3,000.00 and not to exceed P15,000.00

*/ Subject to increase

PHILIPPINE SECURITIES AND EXCHANGE COMMISSION (SEC) Registration of Corporations & Partnerships Main Fees to be Paid (In Pesos)

Stock Corporations

Filing Fee

1/5 of 1% of the Authorized Capital Stock or the subscription price of the subscribed

capital stock whichever is higher but not less than P1,000.00 plus LRF*

By-laws P500.00 plus LRF*

Non-Stock Corporations

Filing Fee of Articles of Incorporation P500.00 plus LRF*

By-laws P500.00 plus LRF*

Partnership

Articles of Partnership 1/5 of 1% of the partnership's capital

but not less than P1,000.00 plus LRF*

DEPARTMENT OF TRADE AND INDUSTRY (DTI) Business Name Registration (Bureau of Trade Regulation and consumer Protection -- BTRCP)

Main Fees to be Paid (In Pesos)

Application Fee P315.00 to P515.00

Single Proprietorship Partnership/Corporation

P300.00 P500.00

Documentary stamp P15.00

Sole Proprietorship under FIA P5,800.00

Business Name Registration Fee Filing Fee

P300.00 P500.00

FIA Registration Fee P5,000.00

Source: http://boi-web/

PHILIPPINE ECONOMIC ZONE AUTHORITY (PEZA) APPLICATION Main Fees to be Paid (In Pesos)

Registration of Ecozone Enterprises

Application for New Project (non-pioneer) P3,600.00

Application for New Project (pioneer) P6,000.00

Application for any Amendments in Registration P1,200.00 (application) P3,600.00 (registration)

Application for Conversion from Non-Pioneer to Pioneer

P2,400.00

Application for Expansion for Production Capacity P2,400.00

Registration Fees

Registration for New Projects P6,000.00

Registration for Expansion of Project - New Project P3,600.00

Telecom Services and Other Utilities P6,000.00 + 10% of monthly gross revenues from operations

All other Services Enterprise P3,600.00

II. PROCESSING FEES

Availment of Incentives

Endorsement of 5% Gross Income Tax and of Income Tax Holiday

P1,200.00

Extension of ITH Entitlement Period P1,200.00

III. CERTIFICATION / TRUE COPIES

Certificate of Registration P120.00

Filing approval of application P120.00

Other Documents P120.00

Source: http://www.peza.gov.ph/

Source: http://www.clark.com.ph/

Source: http://www.ceza.gov.ph/

ZAMBOANGA CITY SPECIAL ECONOMIC ZONE AUTORITY (ZAMBOECOZONE and Freeport Authority)

Main Fees to be Paid

Application Fee (non-refundable) US$50.00

Certificate of Registration & Tax Exemption US$150.00

Permit to Operate

Temporary Permit to Operate (renewable every six months)

US$10.00

Non-registered locators with Physical presence in the Zone

US$100.00

Permit to Operate US$50.00

Accreditation (non-registered companies without physical peresence in the zone)

US$100.00

Certificate of True Copies

Certificate of Registration P100.00

Filing/Approval of Application P100.00

Other Documents P100.00 Source: http://www.zambofreeport.philippine.org/

CLARK DEVELOPMENT CORPORATION (CDC)

Registration of Enterprises Main Fees to be Paid

(In Pesos)

Project Cost not exceeding P 4 million P2,000.00

Certificate of Registration & Tax Exemptions

P2,000.00

Permit to Operate (Annually) P1,000.00

Temporary Permit to Operate P500.00

Processing and issuance of Environmental Compliance Certificate (ECC)

FOR NON-CRITICAL PROJECTS: P300.00 FOR CRITICAL PROJECTS: P3,000.00

Construction In accordance with the National Building Code by

CDC

Certificate of Environmental Compliance P500.00

Special Exit Pass (Hazardous Waste)

P500.00

Note: Regular fees including Clark Special Economic Zone Locations Association shall also be charged to cover expenses for security, road lighting, garbage collection, etc.

CAGAYAN ECONOMIC ZONE AUTHORITY (CEZA)

Application Fee US$200.00

II. TAX RATES Taxation in the Philippines The country's taxation system is governed by the Tax Reform Act 1997, passed into law on December 11, 1997 and became effective on 01 January 1998. The law was aimed at the expanding the country's tax base and maintaining the healthy fiscal standing of the government.

Corporate Income Tax Rates

Domestic/Resident

Foreign Corporation

Non-resident Foreign

Corporation

Taxable income not subject to special tax rates

30% 30%

Interest from deposits and yield from deposit substitutes/trust funds and royalties

20% 35%

Interest on foreign loans N/A 20%

Interest income derived by a domestic corporation from a depository bank under the expanded foreign currency deposit system

7.5% N/A

Dividends from domestic corporations 0 15% / 35%

Gains on sales of shares of stock not traded in the Stock Exchange

Not over P100,000.00 5% 5%

On any amount in excess of P100,000.00 10% 10%

NOTES: The rates of tax applicable for corporations entitled to special tax privileges are set

out below:

1. The corporate tax rate was increased from 32% to 35% with effect from 1 July 2005 but will be reduced to 30% effective 1 January 2009.

2. The rate is reduced to 7.5% for interest income derived by a domestic corporation from a depository bank under the expanded foreign currency deposit system.

3. The rate of 15% applies if the host country exempts the dividend from tax or permits a 20% or greater credit for underlying corporation tax paid by the company paying the dividend.

4. The 5% rate applies to the first P100,000 of gains annually, with the 10% rate applying to the excess. Stocks of shares in listed companies are subject to a 0.5% tax on the sale proceeds.

Entity Rates Tax Base

Proprietary educational institutions and non-profit hospitals

10% Taxable income

Certain enterprises registered with the Philippine Economic Zone Authority

5% Gross income

Non-resident owner or lessor of aircraft, machinery and other equipment

7.5% Gross Philippine rentals, lease, charter fees

Non-resident owners of vessels chartered by 4.5% Gross Philippine rentals,

Philippine nationals and approved by the Maritime Industry Authority

lease, charter fees

Non-resident cinematographic film owners, lessors or distributors

25% Gross Philippine source income

Foreign international carriers (air and sea) 2.5% Gross Philippine billings

Offshore banking units (OBUs) and foreign currency deposit units (FCDUs) authorized by the Bangko Sentral ng Pilipinas

10%

32%

Gross Taxable Income on Foreign Currency Transaction Taxable Income Other than Foreign Currency Transaction

Regional operating headquarters 10% Taxable income

Income Tax Rates as Passive Income of Domestic/Resident Corporation Cash and/or Property Dividends Beginning January 1, 1998 Beginning January 1, 1999 Beginning January 1, 2000 & thereafter

6% 8% 10%

Interest on any currency bank deposit and yield or other monetary benefit from deposit substitutes and from trust fund and similar arrangements

20% of final tax

Interest Income from foreign currency deposits with Foreign Currency Deposit Units (FCDUs)

7.5% of final tax

Gains for shares of stock not listed and traded in the local stock exchange

5% capital gains tax (CGT) on net gains not exceeding P 100,00 and 10% on the amount in excess of P 100,000.

Gains from sale or exchange of land or buildings not actually used in business and treated as capital asset

6% CGT on gross selling price or fair market value, whichever is higher

Royalties (except on books as well as literary & musical composition – 10%)

20%

New Taxes for Corporation Under the Tax Reform Act of 1997 Minimum Corporate Income Tax (MCIT) - A 2% MCIT on gross income on an annual basis is imposed on corporations whose regular corporate income tax liability is less than the MCIT beginning the fourth taxable year following the year they commenced business operation. Any excess of the MCIT over the normal tax shall be carried forward and credited against the normal tax for the three (3) immediately succeeding taxable years. Fringe Benefits Tax - Fringe benefits granted to supervisory and managerial employees are subject to 32% tax on the grossed-up monetary value of the fringe benefit. Fringe benefits given by OBUs regional operating headquarters of multinational companies, petroleum contractors and subcontractors to qualified alien employees and in certain cases, to Filipino employees, are taxed at 15% of the grossed-up monetary value of the fringed benefit.

Improperly Accumulated Earnings Tax - a 10% tax is imposed on the improperly accumulated earnings of a corporation, except in the case of publicly held corporations, banks, and other non-bank financial intermediaries and insurance companies. When a corporation allows its earnings or profits to accumulate beyond its reasonable needs, it shall be assumed that the purpose is to avoid tax on stockholders, unless proven to the contrary.

5 Individual Taxation Rates

Non-resident aliens not engage in trade and business flat income tax rate

25%

Resident citizens/aliens (gainfully employed) Graduated income tax rates

0%-35%

The following individuals shall not be required to file an income tax return:

1. An individual whose gross compensation income does not exceed his total personal and additional exemptions;

2. An individual whose compensation derived from one year employer does not exceed P60,000 and the income tax on which has been correctly withheld;

3. An individual whose income has been subjected to final withholding tax (alien employee as well as Filipino employee occupying the same position as that of the alien employee of regional or area headquarters and regional operating headquarters of multinational companies, petroleum service contractors and sub-contractors, and offshore banking units, non-resident alien not engaged in trade or business), and

4. An individual who is exempt from income tax.

Married individuals shall file single return for the taxable year to include the income of both spouses, separately computing their individual income tax based on their respective taxable income. Where it is impracticable for the spouses to file one return, each spouse may file a separate return.

Tax Table for individuals earning purely compensation income and individuals engaged in business and practice of profession If Taxable Income is:

Tax Due is: If Taxable Income is:

Tax Due is:

Not over P10,000 5% Over P10,000 but not over P30,000

P500+10% of the excess over P10,000

Over P140,000 but not over P250,000

P22,500+25% of the excess over P140,000

Over P30,000 but not over P70,000

P2,500+15% of the excess over P30,000

Over P250,000 but not over P500,000

P50,000+30% of the excess over P250,000

Over P70,000 but not over P140,000

P8,500+20% of the excess over P70,000

Over 500,000 P125,000+34% of the excess over P500,000

Note: Effective January 1, 1999, the maximum rate shall be thirty-three percent (33%) and thirty-two percent 32% on January 1, 2000. Note: When the tax due exceeds P2,000.00, the taxpayer may elect to pay in two equal installments, the first installment to be paid at the time the return is filed and the second installment on or before July 15 of the same year at the Authorized Agent Bank (AAB) within the jurisdiction of the Revenue District Office (RDO) where the taxpayer is registered. Value Added Tax (VAT) Sale of goods, other properties, and services in the Philippines, as well as importation of goods to the Philippines, are subject to the 12% VAT. VAT is imposed on the gross selling price (in case of sale of goods) and gross receipts (in case of sale of services).

Tax Rate

For output tax (0% or 12%)

For input tax on importation of goods or local purchases of goods, properties or services, including lease or use of properties, in the course of trade or business (0% or 12%)

For creditable input tax on advance VAT payments made by the seller/owner of refined sugar and importer/miller of wheat/flour (12%)

Stock Transaction Tax 1/2 of 1% of gross selling price is imposed on the sale, barter, exchange or other disposition of shares through the facilities of stock exchange, which shall be paid by the seller or transferor. Source: Bureau of Internal Revenue (BIR)

COST OF LIVING

I. Education

The Philippines has both private and public school systems for elementary, secondary and college levels. The public schools are subsidized by the Government, fees are minimal and teaching is done in English and Filipino. The normal school year is from June to March.

Foreign nationals have a choice of going to either the elitist local private schools, majority of which are run by religious orders and teaching is done in English, or the international schools.

International School Manila School Fees 2010-2011

Pre-School 3-year old Program US$4,280.00 + P138,600.00

Pre-School 4-year old Program US$ 5,720.00 + P184,800.00

Elementary School (Early Childhood Learning Center – Grade 4)

US$9,040.00 + P289,800.00

Middle School (Grade 5 – 8) US$9,900.00 + P317,200.00

High School (Grade 9 – 10) US$10,520.00 + P338,200.00

High School (Grade 11 – 12) US$11,760.00 + P378,000.00

Matriculation Fee – for all NEW students in grades ECLC & above

US$3,000.00

Facilities Upgrade Deposit – for all NEW students in grades ECLC & above. FUD should be paid in full upon enrollment. Fully refundable when student leaves the school.

US$5,000.00

Application Fee – for Admissions US$200.00

Additional Tuition Fees – if applicable

English as a Second Language (ESL) Year 1 Year 2

US$2,500.00 US$1,500.00

Learning Support Services* Level 1 Support

Level 2 Support Level 3 Support

US$1,250.00 US$3,000.00

US$5,000.00

Miscellaneous Fees

Extra Car Sticker – First Sticker Free P100.00 per sticker

ID P100.00 per piece

Concession Fees – To be arranged with respective concessionaires

Canteen Fee* – Daily snack & lunch for Elementary students only.

P4,500.00/Qtr. Approx.

School Bus Fee* Makati Area Outside Makati Area

P39,920.00/Year P52,892.00/Year

*Subject to change Source: http://www.ismanila.com/ British School Manila School Fees 2009-2010

Nursery ₤ 2,475.00 + P79,500.00

Reception - Year 6 ₤ 4,950.00 + P159,000.00

Year 7 –9 ₤ 5,580.00 + P179,415.00

Year 10 – 11 ₤ 5,865.00 + P188,790.00

Year 12 - 13 ₤ 6,450.00 + P207,000.00

Other School Fees:

Entrance Fee P111,300.00

Application Fee Nursery Reception to Year 13

P1,450.00 P12,450.00

PTA Dues P1,000.00

Yearbook P2,000.00

Source: http://britishschoolmanila.org/

II. Public Transport

Computation of Fares: Add-on Method

1. Jeepneys

As of January 2010, fare costs P7.00 (US$14 cts) for the first 4 kilometers and an additional P1.25 for every succeeding km.

2. Buses (usually used for long journeys)

P9.00 (non-aircon buses) + P1.85 for every succeeding km. P11.00 (air-conditioned) for the first five kilometers + P2.20 for ever succeeding

kilometer

*date of effectivity: December 15, 2008 source: www.ltfrb.gov.ph .

3. Taxi

P30.00 (US$0.60) for the first 500 metres and an additional P2.50 (US$0.10) for every succeeding 300-metres or 2 minutes of stopping.

4. Minivans/FX

These are relatively new mode of transportation. They are generally cheaper than taxis but more expensive than jeepneys. Minimum fare costs around P10.00.

5. Tricycles

P7.00 for ordinary fare (You would likely share the ride with 4 or 5 people.)

P15.00 to P20.00 for special trips.

6. Rails

Light Rail Transit (LRT) Line 1 (also known as Yellow Line) runs along runs along Taft Avenue from Baclaran in Parañaque to the Bonifacio Monument in Kalookan City. Light Rail Transit (LRT) Line 2 (also known as the Purple Line) runs from Santolan in Pasig to Recto in Manila. Metro Rail Transit (MRT) (also known as Line 3 or the Blue Line) runs from North Avenue Station in Quezon City to Taft Avenue Station in Pasay City.

Fare: P10.00 to P15.00

7. Air Transport (Domestic Flights – One way Fare per Person)

P1,000.00 to P3,500.00 III. Shopping in Manila

Metro Manila is considered as shopper’s paradise. The peso exchange rate is favorable to the tourists’ dollars and expatriates relocating to Manila. The major shopping center in Makati is the Ayala Commercial Center housing Glorietta and Greenbelt where most items found overseas can be bought. The SM Mall of Asia (MOA), SM Megamall, Robinson’s Galleria, Rustan’s Department Store and EDSA Plaza Shopping Mall are modern malls with extensive array of consumer goods. These malls offer comfortable shopping with an air conditioned entertainment center where families can spend leisure time. The Divisoria area is for adventuresome bargain hunter/s who wishes to experience a typical Asian open market. It is known for wholesale market which has everything (from nuts to wedding dresses to electronic appliances). Within the area is the Tutuban Center, 168 and Divisoria market, modern and air-conditioned shopping malls that offer variety of products at moderate prices.

MANPOWER COSTS

I. Manpower Resources (Labor):

The laws on labor standards and employment relations are consolidated in the Labor

Code of the Philippines. The salient points of employment conditions and employee benefits under the Philippine labor laws are as follows:

Hours of Work. Eight (8) hours per day or 48 hours per week. Rest periods of short

duration during work hours shall be counted as hours worked.

Meal periods. Every employer shall give his employees not less than sixty (60) minutes time-off for their regular meals.

Night shift differential. Every employee is entitled to a night shift differential of not

less than ten percent (10%) of his regular wage for each hour of work performed between ten o’clock in the evening and six o’clock in the morning.

Work Day. A day is the 24-hour period which commences from the time the

employee regularly starts to work.

Overtime work. An additional compensation equivalent to an employee’s regular wage plus at least twenty-five percent (25%) shall be given if the employee does overtime work. Work performed beyond eight hours on a holiday or rest day shall be paid an additional compensation equivalent to the rate of the first eight hours on a holiday or rest day plus at least thirty percent (30%) thereof.

Minimum Wage (Manufacturing Sector). The minimum wage rate for agricultural

and non-agricultural workers in every region are determined by the Regional Tripartite Wages and Productivity Board.

Fringe Benefits. This refers to goods, services, or other benefits furnished by an

employer in cash or kind, in addition to basic salaries; to managerial or supervisory employees such as but not limited to the following:

Housing

Expense Account

Vehicle of Any Kind

Household personnel, such as maid, driver and others

Interest on loans at less than market rate to the extent of the difference between the market rate and actual rate granted;

Membership fees, dues and other expenses borne by the employer for the employee in social and athletic clubs or other similar organizations;

Holiday and vacation expenses

Educational assistance to the employee or his dependents; and

Life or health insurance and other non-life insurance premiums or similar amounts in excess of what the law allows

Managerial employees refer to those who are given powers or prerogatives to lay down

and execute managerial policies and or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees. Supervisory employees are those who effectively recommend such managerial actions if the exercise of such authority is not merely routinary or clerical in nature but requires the use of independent judgment.

Overtime (OT) Remuneration. Overtime premium is allotted for work exceeding the maximum prescribed period. Every employee who is entitled to premium pay is likewise entitled to the benefit of overtime pay

Computation of Wages.

Computing Overtime: In Ordinary Days Plus 25% of the hourly rate multiplied by the number of hours. On a Rest Day, Special Day or Regular Holiday Plus 30% of the hourly rate on said days multiplied by the number of hours. Computing pay for work done on: A Special Day (130% x basic pay) A Special Day, which is also a scheduled Rest Day (150% x basic pay) A Regular Holiday (200% x basic pay) A Regular Holiday, which is also a scheduled Rest Day (260% x basic pay) Computing Night Shift Premium where Night Shift is a Regular Work: On Ordinary Day (110% x basic hourly rate) On a Rest Day, Special Day, Regular Holiday (110% of regular hourly rate for Rest Day, Special Day, Regular Holiday) Computing Overtime on Night Shift: On Ordinary Day (110% x overtime hourly rate) On Rest Day, Special Day or Regular Holiday (110% x overtime hourly rate for Rest Days, Special Days, Regular Holidays)

Computing 13th Month Pay: Total basic salary earned for the year exclusive of overtime, holiday, and night shift differential pay divided by 12 = 13th month pay.

Source: Bureau of Working Conditions Department of Labor and Employment http://www.bwc.dole.gov.ph/faq.php?page=2

DAILY MINIMUM WAGE RATES National Capital Region (NCR) Per Wage Order No. NCR-14

Sector/ Industry Minimum Wage under Wage Order No. NCR 13

Basic Wage Increase Under W.O. No. NCR 14

Cost of Living Allowance under W.O. NCR 14*

New Minimum Wage Rates

Non-Agriculture P 362.00 P15.00 P 5.00 P 382.00

Agriculture (Plantation and Non Plantation)

P 325.00 P15.00 P 5.00 P 345.00

Private Hospitals with bed capacity of 100 or less

P 325.00 P15.00 P 5.00 P 345.00

Retail/Service Establishments

P 325.00 P15.00 P 5.00 P 345.00

employing 15 workers or less

Manufacturing Establishments regularly employing less than 10 workers

P 325.00 P15.00 P 5.00 P 345.00

SUMMARY OF CURRENT REGIONAL DAILY MINIMUM WAGE RATES Non-Agriculture, Agriculture As of April 2010 (In pesos)

REGION WO No./ DATE OF EFFECTIVITY

NON- AGRICULTURE

AGRICULTURE

Plantation Non-Plantation

NCR a/ WO 14/June 14, 2008 P 382.00 P 345.00 P 345.00

CAR b/ WO 13/June 16, 2008 243.00 - 260.00 226.00 - 242.00 226.00 - 242.00

I c/ WO 13/June 22, 2008 220.00 - 240.00 220.00 195.00

II d/ WO 13/June 15, 2008 227.00 - 235.00 215.00 - 223.00 215.00 - 223.00

III e/ WO 14/June 16, 2008 251.00 - 302.00 236.00 - 272.00 216.00 - 256.00

IV-A f/ WO 13/June 01, 2008 236.00 - 320.00 216.00 - 295.00 196.00 - 275.00

IV-B g/ WO 04/June 19, 2008 240.00 - 252.00 198.00 - 207.00 178.00 - 187.00

V h/ WO 13/ July 1, 2008 196.00 - 239.00 207.00 - 217.00 187.00 - 197.00

VI i/ WO 17/ December 25,2008

208.00 - 250.00 218.00 208.00

VII j/ WO14/June 16, 2008 222.00 - 267.00 202.00 - 249.00 202.00 - 249.00

VIII k/ WO 15/June16, 2008 238.00 219.00 219.00

IX l/ WO 15/ July 3, 2008 240.00 215.00 195.00

X m/ WO 14/June 1, 2008 241.00 - 256.00 229.00 - 244.00 229.00 - 244.00

XI n/ WO 15/June 16, 2008 265.00 255.00 255.00

XII o/ WO 15/June 16, 2008 245.00 225.00 220.00

XIII p/ WO 09/June 20,2008 233.00 223.00 203.00

ARMM q/ WO 11/June 29, 2008 210.00 210.00 210.00

a/ Granted a P 20 increase consisting of P15 basic wage & P5 COLA, The COLA shall be integrated into the basic wage on August 28, 2008. b/ Granted P P10.00 & 15.00 COLA per day depending on the area and industry classification. c/ Granted P 10.00 COLA. d/ Granted P 12.00 wage increase and integrated P8.00 COLA under WO No. RTWPB-II-09 into the basic wage. e/ Granted P 15.00 increase consisting of P5 basic wage & P10 COLA; integrated the P9 COLA under WO No. RB III-13 into the bsic wage. f/ Granted P 12-20 wage increase as follows: P 16-P20 (Growth Corridor Area) P14 (Emerging Growth Area) P12(Resource Based Area) g/ Granted P 10 wage increase to all minimum wage workers & P5 COLA to non-agriculture sector only. h/ Granted P 13 COLA, the P6 from P13 COLA shall be integrated in the basic wage on January 1, 2009. i/ Granted P15 Basic Pay Effective December 25, 2008 j/ Granted P P17.00 wage increase

k/ Granted P10 COLA l/ Granted P 15 wage increase consisting of P5 basic wage and P10 COLA for a period of three months; thereafter, P5 out of the P10 COLA under WO No. IX-14 shall be integrated into the basic wage. m/ Granted P12 COLA & integrated the P16 COLA under WO No. RX-12 into the basic wage. The P10 COLA under WO No. RX-13 shall be integrated into the basic wage on November 16, 2008. n/ Granted P15 COLA & integrated the P16 COLA under WO No. RTWPB XI-13 into the basic wage. The P10 COLA under WO No. RX-14 shall be integrated into the basic wage on September 16, 2008. o/ Granted P 7-10.50 wage increase & P3-5 COLA. p/ Granted P13 increase consisting of P8 basic wage & P5 COLA. q/ Granted P 10.00 wage increase Source: National Wages and Productivity Commission Department of Labor and Employment http://www.nwpc.dole.gov.ph/pages/statistics/stat_current_regional.html

II. Mandatory Employment Contribution

13th Month Pay. Employers are required to give its employees a 13th month pay

equivalent to at least one (1) month salary. 13th month pay should be given not later than

December 24 of every calendar year.**

** Date Last Reviewed: 2009-12-21 12:00:18

Contribution to Home Development and Mutual Fund (HDMF). Companies/employers are also required to contribute at least P100.00 per month to HDMF for employee benefits. Companies/employers remit this contribution plus that of the employee’s which will be deducted from their payroll, in accordance with the periodic remittance schedule provided by HDMF.

Contribution to National Health Insurance Program (NHIP). As mandated by

Republic Act 7835 on Medicare Program which is administered by the Philippine Health Insurance Corporation (Philhealth), both employers and employees are to contribute for the medical insurance/benefits of the employees in accordance with the schedule provided by Philhealth. Premium Contribution Schedule - For the Employed Sector - Effective January 1, 2007 (pdf file)

Source: Philippine Health Insurance Corporation http://www.philhealth.gov.ph/members/employed/contri_tbl.htm

Contributions. As Mandated by law, both employer and employees are to contribute for

the social security benefits of the employees in accordance with the new schedule provided by SSS. SSS Contribution Schedule - Effective January 1, 2007

SSS Contribution Schedule

Source: Social Security System http://www.sss.gov.ph/sss/printversion.jsp?id=111&file=regi_contrib_table.html

TRANSPORTATION COSTS

OCEAN FREIGHT RATES Freight Rates of Ocean going Vessels

Route Freight (US$)

Manila - Kaoshiong 300.00

Manila - Hongkong 250.00

Manila - Singapore 350.00

Singapore - Manila 350.00

Manila - Bangkok 600.00

Manila - Jakarta 650.00

Jakarta - Manila 650.00

Manila - Nagoya/Yokohama 450.00

Manila - Osaka 450.00

Manila - Tokyo 450.00

Cebu - Osaka 650.00

Cebu - Tokyo 650.00

Manila - Middle East 1,750.00

Manila - US West Coast 3,500.00

Manila - US East Coast 4,700.00

Manila - Northern Europe 2,450.00

Manila - Central & Southern Europe 2,300.00 Last Updated: May 13, 2010

Above are the current ocean freight rates from DTI-PSB accredited sea freight forwarders for general merchandise and cargoes. These rates are determined based on recent activity and current freight rates in the international market.

Source: Philippine Shippers’ Bureau

FREIGHT RATES OF DOMESTIC VESSELS FOR EXPORT CARGOES Breakdown of Total Charges

Route Charges 1 Transport Freight/n.m.

Distance nautical

miles (n.m.)

Total Charges (US $)

Auxiliary Charges

Charges from

Repositiong2

Sea Transport

Freight

Sea Transport

Freight/n.m. (US $)

Manila - Cebu 392 553.94 30.12 144.23 311 0.79

Manila - Cagayan de Oro 504 680.34 30.91 166.61 369 0.73

Manila - Zamboanga 512 689.37 30.91 166.61 384 0.75

Manila - Gen. Santos 723 927.50 30.91 166.61 453 0.63

Manila - Davao 829 1,047.14 30.91 166.61 507 0.61

Source: Domestic Shipowners Association 1 Includes local arrastre at ports of origin and destination, wharfage & doc. stamps. 2 Freight of empty containers

FREIGHT RATES FOR CONTAINERIZED CARGOES OF LOCAL ORIGIN/DESTINATION

Route 1 US $ 2

Distance(n.m.) $ Rate/ n.m.

Freight –

P Rate 1 US S2

$ Rate/ nautical miles (n.m.)

Manila - Cebu 392 17,634 354.88 0.79

Manila - Cagayan de Oro 504 21,658 435.86 0.76

Manila - Zamboanga 512 21,946 441.65 0.76

Manila - Gen. Santos 723 29,319.92 590 0.80

Manila - Davao 892 33,335 670.86 0.75

Source: Domestic Shipowners Association 1 Excluding 10% VAT 2 Exchange Rate : 1 US$ = P41.85

FREIGHT RATES FOR CONTAINERIZED CARGOES FOR SELECTED ROUTES: Another category of cargo transport involves non-containerized breakbulk cargoes. Tabulated below are the attendant freight rates for selected routes:

Route Distance

(n.m.) Rate/ n.m.

Freight (per cbm or ton) Rate/n.m.

Manila – Hongkong 633 US$ 5 US $ 0.0079

Manila - Keelung, Taiwan 732 US$ 15 US $ 0.02

Manila – Singapore 1,308 US$ 12 US $ 0.009

Manila - Cagayan de Oro 504 P 503.23 - 773.52 US$

10.12- 15.56 US $ 0.02-0.03

Manila - Gen. Santos 723 P 586.07 - 1,054.54*

US$11.79 - 21.22 US $ 0.016 -0.029

Manila - Davao 829 P 774.57 - 1,190.56

US$15.59- 23.96 US $ .018 - 029

Source: Philippine Shippers’ Bureau for the oceangoing rates and Maritime Industry Authority for the domestic rates. *Covers the range of freight rates for Class C to Class A commodities which are now deregulated Mailing Rates

International

Airmail Letters (20 g. - 2000 g)

P 20 – 2,314.00

Aerogram and Postcards P13.00/pc. to all countries via airmail

Printed Matter (20 g -1,000 g.) (add’l. 500g or less)

P17.00 - 1,109.00 P284.00 - 555.00

Domestic

Ordinary Mail (first 20 grams to 2k)

P7.00 - 113.00 (Intra) P9.00 - 135.00 (Inter/Airmail)

Priority Mail (first 20 grams to 2k)

P13.00 - P 124.00 (Intra) P18.00 - P 146.00 (Inter)

Express (first 20 grams to 2k) P25.00 - 136.00(Intra) P35.00 - 169.00 (Inter)

Registered (first 20 grams to 2k)

P17.00 - 123.00 (Intra) P21.00 - 145.00 (Inter/Airmail)

3rd Class & C.O.D. (first 20 grams and 2k)

P5.00 - 90.00 (Intra) P6.00 - 101.00 (Inter)

Source: Philippine Postal Corporation http://www.philpost.gov.ph/

INTERNATIONAL SHIPPING

FedEx International

For International Priority Shipments (Rates exclude special fee and dynamic fuel charge)

Major Destinations

(From Manila)

China (South),

Hongkong, Taiwan

China (excluding

South), Japan, Thailand

Canada, Mexico

France, Germany,

United Kingdom

Russia, South Africa, United Arab Emirates

US West Coast

Puerto Rico, US

(Rest of the country)

0.5 kg US$10.50 US$14.00 US$23.50 US$36.00 US$41.60 US$23.50 US$23.50

1.0 kg US$13.10 US$16.80 US$28.40 US$44.70 US$52.00 US$28.40 US$28.40

1.5 kg US$15.70 US$19.60 US$33.30 US$53.40 US$62.20 US$33.30 US$33.30

2.0 kg US$18.20 US$22.40 US$38.10 US$62.10 US$72.60 US$38.10 US$38.10

2.5 kg US$20.80 US$25.30 US$43.00 US$70.80 US$82.80 4 US$3.00 US$43.00

Current fuel charge for export shipment as of May 2, 2010 is 10.50%. Source: http://fedex.com/ph/

DHL International

Major Destinations

(From Manila)

Rates

(Document Package, 1 kg)*

Hongkong, Singapore US$17.75

China, Indonesia, Thailand, Japan US$22.97

United Arab Emirates US$32.83

Italy US$30.16

Spain, Finland, Denmark US$32.83

United States Not served by DHL in PH

*Inclusive of fuel charge (Last Updated: May 14, 2010) Source: http://www.dhl.com.ph/

UTILITY COSTS I. GAS AND FUEL COSTS Domestic Oil Prices

The oil players implemented an increase of P 0.50/liter on the prices of gasoline and diesel effective April 06, 2010.

Retail prices in Metro Manila beginning April 6, 2009

Products Calculated Price Price Range Common Price

P/liter

Diesel P38.85 P33.25-P35.50 P34.25

Gasoline P49.59 P42.70-P45.00 P44.75

E10 P40.80-P48.02

Auto LPG P26.90-P28.10

LPG P/11-kg P600.00-P676.00

Sources: Department of Energy http://www.doe.gov.ph/OPM/Pumpprices.htm/

http://www.doe.gov.ph/OPM/Oilmonitor.htm/

II. ELECTRICITY RATES

Industrial Sevice (IS) For industrial customers with a minimum demand of (5) kilowatts for general power, heating and/or lighting. Industrial customers are establishments wherein the main economic activity is mining and quarrying, manufacturing and processing, electricity generation and distribution, and gas and steam manufacturing

Industrial Service Small

Distribution Charge (per kw) P200.60

Supply Charge (per customer) P700.00

Metering Charges (per customer)

Energy

Fixed Amount P360.00

Industrial Medium to Extra Large

Distribution Charge (per kw)

Secondary P200.60

Below 13.2 kv P152.60

13.8/13.2 kv P152.60

34.5 kv P152.60

115 kv P122.76

Supply Charge (per customer)

Metering Charges (per customer)

Energy

Fixed Amount

Power Factor Adjustment

6% surcharge for every percentage point lower than 85%

3% discount for every percentage point higher than 85%

Last updated: 02/11/2010 Source: http://www.meralco.com.ph/

III. WATER RATES

Service Rates and Tariffs

Under the socialized structure of Maynilad’s water rates and tariffs, those who consume less water are charged lower rates. Residential customers who consume 10 cu.m. or less per month are given a 20% discount by Maynilad. Commercial, industrial and high-consuming customers are billed higher rates.

Additional information:

http://mayniladwater.com.ph/uploaded/Tariff_as_of_121609.pdf

IV. TELECOMMUNICATION RATES

Telephone Rentals Residential - Installation - Subscriber Investment Plan - Monthly Rates* Business - Installation - Subscriber Investment Plan - Monthly Rates*

P1,999.00 P1,000.00 P600.00 P3,500.00 P2,000.00 P1,260.46

*Subject to change due to foreign currency adjustment Updated: April 15, 2008

Source: Philippine Long Distance Telephone Company (PLDT) http://www.pldt.com.ph

International Calls PLDT Rates ASEAN / Hongkong / Japan / Macao / South Korea

US$0.15/minute

Australia / New Zealand US$0.40 USA / Canada US$0.40 France / Germany / Italy / Spain / U.K.

US$0.40

China & India US$0.40 Kuwait / UAE / Bahrain / Saudi Arabia

US$0.40

BAYAN PHONE

Plan

Monthly Recurring

Rate

Packages

BASIC P499.00 Unlimited local landline calling

VALUE P699.00 Choose one: -Unlimited local landline calling w/ P50.00 consumable valid for NDD/cellphone calls -Unlimited local landline calling w/ P50.00 consumable valid for IDD

PREMIUM P749.00 Choose one: -Unlimited local landline calling w/ P100.00 consumable valid for NDD/cellphone calls -Unlimited local landline calling w/ P100.00 consumable valid for IDD -Unlimited dial-up internet

Source: http://www.bayan.com.ph/

Cellular Mobile Phone System Local Abroad Text Call Text Call Globe P1.00 P6.50 same

network and P7.50 other network or landline

P15.00 US$0.40/min.

Smart P1.00 P6.50 same network and P7.50 other network or landline

P15.00 US0.40/min

Sun P1.00 P6.50 same network and P7.50 other network or landline

P15.00 US0.40/min.

Fax Charges Local Abroad .40/copy .80/copy 256 KB Frame relay w/ local loop (Mla. To W. Europe)

US$22 to 27,000/month

Internet Service Fees

Installation Fee (Email Account) Free to P800.00 Installation Fee (Web Account) P500.00 Subscription Rates (Varies depending on the type of plans – monthly, quarterly, semi-annual & annual- & number of hours to be used by the company)

PLDT *

Broadband Internet Access (DSL) 1.0 Mbps *P999.00/ month

2.0 Mbps *P1,995.00/ month

3.0 Mbps *P3,000.00/ month

For Corporation's LAN to Internet Requirement

Package Download Committed Information

Rate Monthly Recurring Charge

(Php)

SmallBiz Micro up to 2.0 Mbps 64 Kbps 3,000

SmallBiz Lite up to 2.2 Mbps 128 Kbps 4,000

SmallBiz Jr. up to 2.7 Mbps 256 Kbps 8,000

SmallBiz Sr. up to 3.0 Mbps 384 Kbps 14,500

Powerpacked A up to 3.2 Mbps 512 Kbps 25,000

Powerpacked B up to 3.5 Mbps 768 Kbps 46,000

Powerpacked C up to 4.0 Mbps 1024 Kbps 80,000

SMART BRO

Product Speed No. of hours use Connection Initial Payment

PREPAID Up to 2 Mbps

Pay per use (P10.00/30 mins), surf-per-minute charging (online registration required)

Wireless Connection (Via USB Modem)

P995.00 with free 5 hours of internet surfing

PLAN 999 Up to 2 Mbps

Unlimited Broadband, Fixed wireless connection, Plug-it modem

P999.00

SHARE IT Up to 2 Mbps

Unlimited Wireless Connection (Via Wifi Router)

1st mo. MSF P999.00, Free Router

SURFTV Up to 2 Mbps

Pay per use (P10.00/30 mins), surf-per-minute charging (online registration required)

RCA connection to your TV to SurfTV

P4,500.00 includes SurfTV, prepaid plug-it, mouse & keyboard

Source: http://smart.com.ph/bro/